Recently, Aussie-Gamer crashed the Sydney, Australia based studios of Nnooo to have a sit down chat with founder and Creative Director Nic Watt and Business Director Bruce Thomson.

When I say “crashed”, I mean it: we literally walked in off the street with five minutes notice (not something I’d endorse for fear of the guys releasing the hounds) and zero preparation, baring doughnuts as a peace offering.

The tiny Nnooo studio is trendy and stylish, nestled in a modern dockyards overlooking Sydney’s iconic Darling Harbor. The teams desks were adorned with iMac computers, a curious white box and various handheld consoles. A main wall separating the studio from the neighbours was covered in post-it notes and sketches, detailing all the ideas and plans that were poured into Spirit Hunters Inc. and escapeVektor.

One team member was eagerly looking through a large black box of source code, trying to find a bug. Another was drumming his fingers as he waiting for a video of Spirit Hunters Inc. to render, that would later be sent to the Australian Classification Board for classification approval.

Running on nothing but fanboyism and sugar, Contributing Editor Jayden Williams and myself sat down with Nic Watt and Bruce Thomson and fired off a series of questions. Here is part one of that interview.

Part 1: escapeVektor and the Australian Video Game Industry

Aussie-Gamer: You originally released escapeVektor on WiiWare, why decide to do it again on 3DS and Vita?

Nic Watt – It’s really well reviewed, it’s probably our best rated game and we won a few “Best WiiWare Game of the Year” awards and things like that from various websites so we just thought we’ve got a really strong IP there, and WiiWare was probably not the best platform for it because the Wii itself was starting to tail off a bit at that point. I don’t think many people were taking advantage of Wii — the online connectivity of it; I don’t think many customers knew about it.

So we had approval for Nintendo 3DS and wanted to do a game for it and for a company our sized it makes sense to take something we’ve already got and to move that onto a new platform and to try out it’s enhancements.

To try and build a game from scratch there’s a large setup process just to finally get it all working, and Spirit Hunters at that point was already taking much longer than we anticipated – we thought it would be a 6 month project and it’s taken two and a half years – so we needed a relatively easy win and we wanted to bring out another game.

We’re mostly known for doing Pop!, MyNotebook and MyDiary and we wanted to show that that’s not what we’re all about.

escapeVektor itself really suits the two platforms – I really like it in 3D on the Nintendo 3DS and the style of the graphics really suit the crispness of the screen on the Vita.

Bruce Thomson – They are very different games on each of the different handhelds and I think that fans of both each Sony and Nintendo are going to enjoy them. What’s really going to be brought out is why they bought their consoles – what they like about their consoles, the 3D nature of the 3DS and the really sharp, crisp nature of the PlayStation Vita.

Watt – And we’ve also added gyroscope camera support to the PlayStation Vita version – forward tilt of the device lets you see a little more of the level. We could’ve done this on 3DS but decided not to because it breaks the 3D effect.

What I try to do when developing games is… I’m a big, kid gamer basically and whenever I get a new bit of hardware I get really excited about the potential of the new hardware. Nintendo and Sony are really good at putting new bells and whistles onto their consoles. It’s like “oh! That’s cool! I wonder what they’re going to do with that”.

I remember being a fan when I just used to buy games and thinking “oh! what are they going to do with that feature?!” so that’s what we try to draw out in our games – particularly with Spirit Hunters where we’re tying to say “there’s this cool camera, there’s an awesome touchscreen and all this great technology in the Nintendo DSi, we’ve put it all together to make something that you thought would be cool about the hardware when you first bought it.” and reinvigorate that sense of excitement.

A-G – I think a lot of people are excited to get their hands on escapeVektor when it hits consoles — any release date?

Watt – We’re aiming for the end of this year for escapeVektor at the moment. It’s going to be quite tight because it’s the first time we’ve done two platforms simultaneously, so there’s a lot of logistics to work out there to get the release dates at the same time on Nintendo and Sony platforms, which is going to be interesting.

We’ve never made a game for a Sony platform — in previous companies I’ve worked on PlayStation One games, but Nnooo has no experience in releasing a game on a Sony platform, so there might besome ideosyncrocies that we’re not really used to.

I think everyone says that Nintendo’s approval process is probably the hardest one out of the big three, so the fact that we’ve been through that and are quite used to it will hopefully help us out with the Vita, but I’m not relying on that at the moment! (laughs)

A-G – A lot of people seem to say how hard Nintendo’s approval process is and their online strategy isn’t profitable – how do you guys find working not just with Nintendo but with Sony as well? Are they easy to work with?

Watt – Like anything, when you first start out with any of these companies – we’re a company of five, we’re tiny and Nintendo and Sony are used to working with the EA’s and Ubisoft’s of this world so their bottom line is not nearly affected by whatever we do or don’t do on their platform.

So for any independent developer out there who does join these platforms, you’ve got to realise that. Having said that, they’re really good at treating everyone fairly – all the software support and developer support that we get from them, there’s no noticeable difference between how they treat us and how they treat EA.

Now I’m sure at EA, they’ve got a lot of other contacts they can use to get things pushed through the various departments, but we spent a lot of time building up a really good working relationship with Nintendo of America in particular because that’s our biggest market by having a lot of face-to-face meetings, going to E3 and GDC is more important for us just for making these sorts of contacts than anything else and that really helps.

Thomson – Recently at Gamescom, we met with Nintendo of Europe and everyone of these meetings brings huge benefits to us. As Nic said, it takes a while to get used to and we’re used to the process now – and we realise that the process is there to make sure that the product is at a very very high standard and we want to be considered alongside the EA’s in terms of the ability to make games that are a very high standard.

Watt – I think that’s the thing that you’ve got to realise, too that if you do go onto one of these platforms as a developer, one of the things you’ve got to accept is that people buy Nintendo or a Sony device for really amazing, well polished games. So, if you’re wanting to make a cheap buck and wanting to shove some shovelware out there then maybe these are not the right platforms for you, and maybe that’s why you’re not making money.

But if you want to actually knuckle down and do something that’s really cool, quirky and different that suits the platform and is really well polished, then Nintendo or Sony are going to get behind you right there because they want things that are exciting on their platform, and fans are going to respond to it a lot better because they’re looking for something cool and eye catching and maybe something slightly different.

But at the same time, you’ve got to try to appeal to the demographics as well. I would say that a cute, colourful, bright, fun game on a Nintendo platform is probably better suited than trying to do some realistic, gritty, urban based First Person Shooter because that’s just the way the demographic moves.

In terms of profitability I think it is there, you’ve got to be careful with what you target and how long you spend with things. I think Spirit Hunters is going to be quite risky for us because we have spent so long on it, it has been quite an expensive project. I’m hopeful that the fact that we’ve carved a niche in that something no-one else has really done before, that it is something different, exciting, vibrant and colourful — I’m hopeful that will make it stand out but we’ll just have to wait and see.

Finally, in terms of how tough they are with their technical requirements – I went through the same things, thinking “Nintendo I hate you, you’re horrible” when we were doing “Pop!” because we had never really experienced this before. We were failing a few times on our submissions, and you’re just looking at it thinking “really?!”. But having been to a few talks with the people who write these rules you realise that they’re trying to make sure the user gets a consistent experience at the end of the day. They want the user to turn your game on and not think that either a) Their machine’s broken or b) the game’s broken.

So every thing that you do, and the lists you get back from Nintendo — and they give you all the information in advance, it’s not like it’s hidden from you — so you can have it all from day one. If you read it and implement it from the get-go, and treat it like it’s part of the process, it’s WAY easier than trying to shoe-horn it in the end and freaking out about them reacting badly to it.

What’s always in the back of our minds, whenever we hire someone new is “don’t look at this as a chore, look at it from the other angle and say ‘why is Nintendo doing this?'” – they’re doing this because if you don’t do this correctly it’ll look broken to the user and then the user will think our game sucks.

A-G (Tynan Muddle) – I think that shines through – when I picked up Spirit Hunters just before it felt like a full retail game, not something you’d except to find on DSiWare…

BOTH: Thankyou!

Bruce: A lot of people have said that actually and some of the guys over in the UK when we were there showcasing it said “Yeah, I’d pay $40 for this” and then we said “well, no it’s a downloadable game”!

So that’s good!

Watt: We think we’ve provided a lot of good value for money there. The funny thing is that the amount of money we get back per sale on an $8 game is probably about the same amount of money, if not more, than what we’d get back if we actually sold it for $30. We’d have to find a publisher… If we’re selling a $30 cartridge in the store, the publisher is probably going to get back 20 per cent of that, or 25 per cent. Then there’s a cut that goes to Nintendo for the manufacturing and then the publisher takes a load for advertising and everything else they’ve got to do and then we get a tiny slice of it.

Whereas we get about the same rate as we do on Apple platforms which is pretty high — Apple’s around 70% I think.

A-G- The industry in Australia has taken a nose-dive recently, what do you think the problem is? Is it government? Are they doing enough for you? Is it lack of interest? Are you not making sales? What’s the problem from your point of view?

Watt: I think there’s a lot of things happening. Obviously the GFC hasn’t helped Australia because we’re doing amazingly well with all the stuff that we’re digging out of the ground, but it’s made the Aussie Dollar really, really strong.

So for our company, when we first started we were getting $1.60 for every US dollar because we get paid in American currency from Nintendo of America. Now we get $0.90 for every 1 US dollar, so we’ve almost halved our revenue just because of the Global Financial Crisis.

So that’s hit us really hard. But if you look at it on the other side, if you’re Krome for example, who’s a big developer and you’re being funded by an American publisher, then Krome’s development cost for adding any additional staff has just doubled – and you’re not getting anything different for that doubling from the American’s perspective, because it’s the same studio, the same staff – they’re as talented as they were yesterday but because of the way things have changed, they’re now twice as expensive as they were. So that probably put a lot of people off.

So I think the Australian Government could do a lot to help – I mean there’s got to be things that they can do to bring the Aussie dollar back to where it should be, because I don’t think it’s actually benefitting anyone at the moment quite frankly – it’s not making our stuff any cheaper. It’s not making tourists want to come here, so I think that would be a good thing.

I think the other thing they could do is — if you look at Canada the funding model that Canada has and I think Ireland are introducing something similar, or even perhaps better — it’s clearly working really well. There are so many big games made in Canada now, so many big studio built and if you look there’s a lot of really good indie titles that are coming out. Fez was made in Canada, for example – but there’s a lot of really really good and really creative titles coming out of Canada.

So that funding model is bolstering education, it’s keeping people in jobs in Canada, it’s building up Canadian companies or at least international companies are moving to Canada and it’s keeping money in that country.

So when we go into recession, there’s going to be a lot of people looking for jobs and this is the time we should be funding other industries to help them grow so the country isn’t just relying on just one amazing source of revenue.

Bruce: You need to be making your own IP as well. “Work for Hire” for third parties is not something that puts you in charge of your own destiny. When you have someone who could just switch the tap off overnight, they could do it and the whole company goes down. Now as the industry is re-shaping itself, big companies and small need to add their own Intellectual Property.

It’s been hard for us, as Nic said, because the economy has been going down a path over the last few years but we are still in charge of what we do: we decide whether we move forward with the project or move sideways or put it on hold for a while because we know where our income stream is so we can project where things are going and re-organise ourselves.

But if you work for hire the “tap” seems to be either on or off and there’s nothing you can do when it’s switched off overnight.

Watt: What makes it harder in Australia is the fragmented government. We’ve obviously got Federal Government but they don’t really step into funding that same way. Everything seems to go through Film Australia which the GDA (game developers association) are working with Film Australia to get a general, cross-country policy, but now it’s mostly left to state governments.

The New South Wales government are good and they’re doing better than they’ve ever done but are not great if you compare them to Victoria. If you look at the development situation in Victoria and Melbourne and how many developers there are there and they have the IDGA and all these things happening there – they have a really good community down there, they have good funding, they get to go to PAX and all these things using the funding systems that they’ve got there.

I know the GDA is talking and it takes a while – our government is really slow to do anything so it takes a while and I know they’re talking to the government at the moment and are working with Film Australia. Basically in films you get this thing called a “Producers Offset” where the government refunds a certain perfect of the cost of the film.

It’s a really good model and it helps keep the film industry here alive and it’s applicable to small projects and really big projects – so movies like Happy Feet would’ve taken advantage of it. So they’re looking to bring that sort of system to games as well and that would really, really help – being able to have government help build up these creative industries, it means companies are able to take more risks.

And if you want to see new content that isn’t run of the mill “I’m going to make some popular game that someone else made last year and make a version of that” – if you don’t want that, then you need someone to help fund that creative spark and that’s what’s you see in Canada and that’s why there’s all these creative games and weird, quirky things are coming out – now the money is starting to flow.

Bruce: There’s also a research tax offset, which is handy. Most of what we do here is research and development in video games, and you can classify most of that as R&D and the government has just introduced a new tax offset scheme which is quite generous, so it’s definently moving in the right direction.

Watt: It’s good for advertising as well. If took our booth out to, let’s say PAX — if we go above a certain expenditure threshold, we can get that back for all of our marketing as well.

So there are some really good things. I think it needs to be done federally because you want it to apply to all Australians – just because you happen to be born in Perth and wanted to set up a developer studio in Perth, that shouldn’t be preventing you from making great games.

A-G – So when we look at studios like Team Bondi for example, you have to ask what’s causing these studios to close down?

Watt: It’s the strength of the Aussie dollar and the fact that everyone’s doing work for hire — that’s the reason these studios are closing down. But you know, universities in Australia are getting better like Qantm for example – two of our team members are from Qantum and I think they’ve got a couple of campuses around the country. So the education side is definitely beginning to grow.

Did you know that the majority of employees at Valve are Australian? If you break it down, the one largest national representation in Valve are Australian. So we’re clearly educating people in a really good way.

So I think what happens in times like this is that it encourages people who are really passionate to take calculated risks. There are a lot of positive stories that have come out of the current climate, but I think it is a lot harder currently.